The last few days on the Warsaw Stock Exchange were characterized by a lack of determination among investors. During last week we could observe a “battle” between two opposing market forces. On the one side there were worries about the rising Polish budget deficit, which dampened the sentiment on the WSE at the beginning of the week. The stronger fall of the WIG and WIG20 was inhibited by positive investment moods on global markets, which dominated in the second part of the week.

Investors are still worried about the worsening conditions of Poland's public finances – the preliminary budget for 2010 assumes a total budget gap of 7 percent of GDP. This in turn will delay the date of accession to the euro zone, which market participants consider to be a guarantee of Poland’s economic stability and creditworthiness.

The global stock exchanges however seem as if they don’t care about predictions for a strong correction and have again beaten their year-to-date maximums. This helped the WIG20 to mount a comeback on Wednesday and Thursday after a fall at the beginning of the week.

Over the last few days, quite a lot of data on the Polish economy has been released. Consumer inflation rose again – in September the CPI indicator increased by 0.1 percent to a level 3.7 percent y/y. Industrial production and wages in the Polish corporate sector proved to be worse than expected.

Industrial production decreased last month by 0.2 percent y/y, whereas the market had forecast its rise by 0.4 percent y/y. The pace of wage growth came to 3 percent y/y, versus expectations of an increase by 3.7 percent y/y. These data, however, did not have too much of an impact on the WSE, which remained under the influence of the two aforementioned forces.

 

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Thanks for sharing this.

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Awesome post. I'm really interested in the Polish economy now.